CLIENT CASE STUDY

Bankinter: Mutual and pension funds administration

Bankinter S.A. is a Spanish commercial bank whose mission is to create long term value for shareholders, customers, employees and society in general.

Overview

In the last 20 years, the bank’s annualized accumulated average return was 31 percent (including dividends and par value repayments) and the capitalization value has multiplied approximately 50 times over that period. Bankinter has been a pioneer in Internet banking, customer satisfaction and quality of service improvements.

Continuously working to improve quality, service and efficiency, Bankinter decided that an outsourcing arrangement would be the best way to administer the distribution of its mutual and pension funds. This would allow Bankinter to focus on core business activities, reduce costs, change fixed costs into variable costs and increase service quality.

In order to realize the full range of benefits possible through outsourcing, Bankinter wanted to team with a provider that combined extensive business knowledge, quality of service and technical expertise. Bankinter leadership opted to build on their longstanding relationship with Accenture because they recognized Accenture’s deep industry experience, proven track-record and clear commitment to results in funds administration.

Solution

Accenture established a Mutual and Pension Funds Administration Integrated Service Center with Bankinter as its charter client. The new fund servicing center is focused on continuous quality and efficiency improvements in mutual and pension fund administration and the process of calculating daily valuations. Accenture designed industrialized processes and executed a transition plan to transfer these key functions from Bankinter to the new fund service center where Accenture provides a comprehensive range of services, including:

Service management

Business process outsourcing, covering the full range of fund administration and operations:

daily valuation calculations

official and customer report preparation assistance

external investment products distribution

quality and continuous improvement monitoring

technical and functional branch support

Application outsourcing to support service applications maintenance

Infrastructure outsourcing to support systems operation, including a contingency center

Results

By outsourcing mutual and pension funds administration to Accenture, Bankinter is realizing a broad range of benefits. Bankinter’s resources are optimized to focus on core aspects of their asset management business, including portfolio planning, product construction, trading/dealing, sales and risk control, while Accenture handles middle- and back-office activities.

In turn, the outsourcing arrangement generates benefits that have a direct impact on Bankinter’s profit and loss ratio.

These include:

Immediate and recurrent cost reduction

Simplified cost control processes

Reduced expenditure for regulatory compliance

Capital optimization to avoid unproductive investments or expenses

Quality of service has also improved as a result of the arrangement. Bankinter now has:

Improved time to market for new products

Access to high added value technology and platforms

Increased automation that minimizes manual processing errors

Centralized access to a single specialized source for operations, technology and markets

Bankinter has realized an estimated cost reduction of 15 percent for the administration of their mutual and pension funds, while increasing volume by 30 percent. Bankinter has increased the number of funds managed from 71 in 2003 to 96 in 2010, with €4.5 billion of assets under management. During 2008, the efficiency ratio (expenses as a percentage of revenue) improved from 53.94 percent to 47.15 percent. Bankinter Gestión de Activos has been named one of the 100 best fund managers in Europe.

Outsourcing the administration of its mutual and pension funds has provided Bankinter’s shareholders with increased value, not only through immediate and long-term cost-savings, but also because it is positioning the company for high performance as a successful innovator in industrializing its operating model.
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